MTR Gaming Group, Inc. (NasdaqGS:MNTG) today announced financial
results for the second quarter and six months ended June 30,
2014.
Second Quarter 2014 Results
For the second quarter of 2014, the Company’s total net revenues
were $124.9 million, a decrease of 4.9% compared to $131.4 million
in the same period of 2013. Adjusted EBITDA in the second quarter
of 2014 was $25.6 million, a decrease of 7.0% from the prior-year
period, and adjusted EBITDA margin was 20.5%, a decrease of 40
basis points from the prior-year period.
“Our second quarter results were once again affected by a
challenging regional operating environment,” said Joseph L.
Billhimer, President and Chief Operating Officer of MTR Gaming
Group, Inc. “We were pleased with the continued strong performance
of our Scioto Downs gaming facility, which has been a stellar
performer since its opening in mid-2012 despite the increase in
competition since that time. Our Mountaineer and Presque Isle Downs
operations were affected in the second quarter by another round of
increased competition from Ohio’s expanding gaming market. Looking
ahead, our management teams remain focused on our core fundamental
day-to-day operations as we evaluate the changing competitive
environment in each of our markets and prepare for one more round
of competitors opening in our region.”
The Company reported a net loss of $1.2 million for the second
quarter of 2014, or $0.04 per diluted share, compared to net income
of $2.4 million, or $0.08 per diluted share, in the same period of
2013. Excluding $0.4 million in strategic transaction costs
associated with MTR Gaming’s impending merger with Eldorado HoldCo
LLC (“Eldorado”), the net loss in the second quarter of 2014 would
have been $0.8 million, or $0.03 per diluted share.
Net revenues at Scioto Downs increased 2.3% to $38.4 million in
the second quarter of 2014 compared to $37.6 million in the second
quarter of 2013. The property saw adjusted EBITDA increase to $13.0
million from $12.6 million in the comparable quarter of 2013, while
the adjusted EBITDA margin at Scioto Downs increased to 33.8%
compared to 33.6% in the prior-year quarter despite an increase in
the amounts contributed to purses for racing by 1.5%.
Net revenues at Mountaineer Casino, Racetrack & Resort
decreased 5.7% to $48.8 million in the second quarter of 2014
compared to $51.7 million in the second quarter of 2013. Revenues
from slots and table games decreased by $2.1 million and $0.6
million, respectively, compared to the same quarter of 2013. The
property saw adjusted EBITDA decrease to $8.8 million from $9.9
million in the comparable quarter of 2013, while the adjusted
EBITDA margin at Mountaineer decreased to 18.0% compared to 19.1%
in the prior-year quarter.
Net revenues at Presque Isle Downs & Casino decreased 10.4%
to $37.7 million in the second quarter of 2014 compared to $42.1
million in the second quarter of 2013. Revenues from slots and
table games decreased by $3.9 million and $0.4 million,
respectively, compared to the same quarter of 2013. The property
generated adjusted EBITDA of $5.9 million compared to $7.4 million
in the same quarter of 2013, while the adjusted EBITDA margin
decreased to 15.5% compared to 17.6% in the prior-year quarter.
The decrease in the Company’s net revenues and adjusted EBITDA
for the second quarter of 2014 was primarily attributable to
additional gaming competition from Ohio, as well as continued
competitive pressure from existing casinos in that market.
Corporate overhead costs totaled $2.1 million during the second
quarter of 2014, exclusive of $0.4 million in costs associated with
strategic initiatives, compared to $2.4 million in the prior-year
period.
Six Month Results
For the first half of 2014, MTR’s total net revenues decreased
5.7% to $239.7 million from $254.1 million in the first half of
2013. Adjusted EBITDA of $46.1 million decreased 12.2% from $52.4
million in the same period last year. The 2014 year-to-date net
loss was $7.4 million, or $0.26 per diluted share, compared to net
income of $1.6 million, or $0.06 per diluted share, in the
prior-year period. Excluding $0.9 million in strategic transaction
costs associated with MTR Gaming’s impending merger with Eldorado,
the net loss in the first half of 2014 would have been $6.5
million, or $0.23 per diluted share.
See attached tables, including a reconciliation of net loss, a
GAAP financial measure, to adjusted EBITDA, as well as the
calculation of adjusted EBITDA margin, each of which are non-GAAP
financial measures.
Balance Sheet and Liquidity
As of June 30, 2014, MTR had $104.7 million in cash and cash
equivalents, $7.9 million in restricted cash and $559.9 million in
total debt, net of discount. In addition, the Company has $20
million available for borrowing under its revolving credit
facility.
MTR Gaming-Eldorado Merger Developments
The Company’s previously announced strategic business
combination with Eldorado pursuant to which the Company and
Eldorado will become wholly-owned subsidiaries of Eclair Holdings
Company (“ERI”), which will be renamed “Eldorado
Resorts, Inc.”, remains subject to certain conditions and
approvals, including regulatory approvals from gaming regulators in
Pennsylvania, registration and listing of ERI shares and customary
closing conditions. The proposed combination has been approved by
MTR stockholders and gaming regulators in West Virginia, Nevada,
Louisiana and Ohio. The transaction is expected to close in the
third quarter of 2014. For more information about these milestones
and other conditions and approvals required, please see the
Registration Statement on Form S-4 and applicable amendments
(File No. 333-192086) filed by Eclair Holdings Company with the
Securities and Exchange Commission, as well as other relevant
documents concerning the proposed combination.
Reconciliation of GAAP Measures to Non-GAAP Measures
Adjusted EBITDA represents earnings (losses) before interest
expense (income), income taxes, depreciation and amortization, gain
(loss) on the sale or disposal of property, other regulatory gaming
assessment costs, loss on asset impairment, project-opening costs,
strategic transaction costs, loss on debt modification and
extinguishments and equity in loss of unconsolidated joint venture,
to the extent that such items existed in the periods presented.
Adjusted EBITDA margin represents the calculation of adjusted
EBITDA divided by net revenues. Adjusted EBITDA and adjusted EBITDA
margin are not measures of performance or liquidity calculated in
accordance with generally accepted accounting principles (“GAAP”),
are unaudited and should not be considered as an alternative to, or
more meaningful than, net income (loss) or operating margin as
indicators of our operating performance, or cash flows from
operating activities, as a measure of liquidity. Adjusted EBITDA
and adjusted EBITDA margin have been presented as supplemental
disclosures because they are widely used measures of performance
and basis’ for valuation of companies in our industry. Management
of the Company uses adjusted EBITDA and adjusted EBITDA margin as
primary measures of the Company’s operating performance and as
components in evaluating the performance of operating personnel.
Uses of cash flows that are not reflected in adjusted EBITDA
include capital expenditures, interest payments, income taxes, debt
principal repayments, and certain regulatory gaming assessments
which can be significant. Moreover, other companies that provide
EBITDA and/or adjusted EBITDA information may calculate EBITDA
and/or adjusted EBITDA differently than we do. A reconciliation of
GAAP net income (loss) to adjusted EBITDA, as well as the
calculation of adjusted EBITDA margin, is included in the financial
tables accompanying this release.
Conference Call
Management will conduct a conference call focusing on the
financial results today at 9:00 a.m. EDT. Interested parties may
participate in the call by dialing (888) 417-8465. Please call in
10 minutes before the call is scheduled to begin and ask for the
MTR Gaming call (conference ID # 5599888).
The conference call will be webcast live via the Investor
Relations section of the Company’s website at www.mtrgaming.com. To
listen to the live webcast please go to the website at least 15
minutes early to register, download and install any necessary audio
software. If you are unable to listen live, the conference call
will be archived on the Investor Relations section of the Company’s
website.
A replay of the call will be available two hours following the
end of the call through midnight EDT on Friday, August 15, 2014 at
www.mtrgaming.com and by telephone at (877) 870-5176; passcode
5599888.
About MTR Gaming Group, Inc.
MTR Gaming Group, Inc. is a hospitality and gaming company that
through subsidiaries owns and operates Mountaineer Casino,
Racetrack & Resort in Chester, West Virginia; Presque Isle
Downs & Casino in Erie, Pennsylvania; and Scioto Downs in
Columbus, Ohio. For more information, please visit
www.mtrgaming.com
Forward-Looking Statements
Except for historical information, this press release contains
forward-looking statements concerning, among other things the
prospects for improving the results of our operations at
Mountaineer, Presque Isle Downs and Scioto Downs, including the
successful operation of video lottery terminals at Scioto Downs.
Such statements are subject to a number of risks and uncertainties
that could cause the statements made to be incorrect and/or for
actual results to differ materially. Those risks and uncertainties
include, but are not limited to, the impact of new competition for
Mountaineer, Presque Isle Downs and Scioto Downs (including casino
gaming and video lottery terminals in Ohio), the successful
integration and operation of video lottery terminals at Scioto
Downs, the effectiveness of our marketing programs, the enactment
of future gaming legislation in the jurisdictions in which we
operate, changes in, or failure to comply with, laws, regulations
or the conditions of our gaming licenses, accounting standards or
environmental laws, including adverse changes in the gaming tax
rates that the Company currently pays in its various jurisdictions,
general economic conditions, disruption (occasioned by weather
conditions or work stoppages) of our operations, our ability to
maintain or improve our operating margins, our continued
suitability to hold and obtain renewals of our gaming and racing
licenses, our ability to fulfill our obligations and comply with
the covenants associated with our various debt instruments and/or
our ability to obtain additional debt and/or equity financing, if
and when needed, the impact of our announced combination with
Eldorado, and other factors described in the Company’s periodic
reports filed with the Securities and Exchange Commission. The
Company does not intend to update publicly any forward-looking
statements, except as may be required by law. The cautionary advice
in this paragraph is permitted by the Private Securities Litigation
Reform Act of 1995.
MTR GAMING GROUP, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (dollars in thousands, except per share
amounts) (unaudited)
Three Months Ended Six Months Ended June 30
June 30 2014 2013 2014 2013
Revenues: Gaming
$112,656
$119,186
$ 219,606 $ 233,955 Pari-mutuel commissions 3,343 3,419 4,623 4,799
Food, beverage and lodging 10,300 10,808 19,295 20,296 Other
3,853 3,634
6,274 5,791 Total revenues
130,152 137,047 249,798 264,841 Less promotional allowances
(5,252 ) (5,670
) (10,070 )
(10,737 ) Net revenues
124,900 131,377
239,728 254,104
Operating expenses: Costs of operating departments: Gaming 66,535
69,051 129,864 136,272 Pari-mutuel commissions 3,356 3,376 5,225
5,228 Food, beverage and lodging 7,947 8,276 15,286 15,795 Other
2,333 2,299 3,858 3,840 Marketing and promotions 3,784 4,150 7,115
7,761 General and administrative 15,490 16,533 32,410 32,510
Strategic transaction costs 383 - 904 - Depreciation 7,705 7,547
15,489 15,091 Loss (gain) on the sale or disposal of property
27 (11 )
45 (93 ) Total
operating expenses
107,560 111,221
210,196 216,404
Operating income 17,340 20,156 29,532 37,700 Other
income (expense): Interest income 2 8 4 22 Interest expense
(17,391 ) (17,392
) (34,781 )
(34,783 ) (Loss) income before
income taxes (49 ) 2,772 (5,245 ) 2,939 Provision for income taxes
(1,133 ) (386 )
(2,150 ) (1,339
) Net (loss) income $
(1,182 ) $ 2,386
$ (7,395 )
$ 1,600 Net (loss) income per
common share Basic
$ (0.04 ) $
0.08 $ (0.26 ) $
0.06 Diluted
$ (0.04 )
$ 0.08 $ (0.26 )
$ 0.06 Weighted average number of
shares outstanding: Basic
28,723,204
28,179,851 28,614,440
28,159,131 Diluted
28,723,204
28,456,713 28,614,440
28,501,793 MTR GAMING GROUP,
INC. SELECTED FINANCIAL INFORMATION (dollars in
thousands) (unaudited)
Three Months Ended Six Months Ended June 30
June 30 2014 2013 2014 2013
Net revenues: Mountaineer Casino, Racetrack &
Resort $ 48,783 $ 51,736 $ 94,712 $ 100,901 Presque Isle Downs
& Casino 37,702 42,077 70,817 79,668 Scioto Downs 38,415 37,564
74,199 73,535 Corporate
-
- -
- Consolidated net revenues
$ 124,900
$ 131,377
$ 239,728
$ 254,104
Adjusted EBITDA from continuing operations:
Mountaineer Casino, Racetrack & Resort $ 8,788 $ 9,876 $ 16,026
$ 18,176 Presque Isle Downs & Casino 5,855 7,388 9,988 13,658
Scioto Downs 13,003 12,627 24,992 25,577 Corporate
(2,091 ) (2,413
) (4,953 )
(4,976 ) Consolidated Adjusted
EBITDA $ 25,555
$ 27,478
$ 46,053
$ 52,435
_______________________________________________________________________
The following tables set forth a
reconciliation of income (loss) from continuing operations and
income (loss) from discontinued operations, GAAPfinancial measures,
to Adjusted EBITDA, as well as the calculation of Adjusted EBITDA
margin, non-GAAP financial measures.
_______________________________________________________________________
Three Months Ended Six Months Ended
June 30 June 30 2014 2013 2014
2013 Adjusted EBITDA: Mountaineer
Casino, Racetrack & Resort: Net income $ 6,541 $ 7,678 $
11,478 $ 13,758 Interest income - - - (2 ) Depreciation 2,255 2,218
4,557 4,450 Gain on the sale or disposal of property
(8 ) (20
) (9 )
(30 ) Adjusted EBITDA
$ 8,788 $
9,876 $ 16,026
$ 18,176 Net revenues
$ 48,783 $
51,736 $ 94,712
$ 100,901 Adjusted
EBITDA margin 18.0
% 19.1
% 16.9
% 18.0
% Presque Isle Downs &
Casino: Net income $ 3,082 $ 5,021 $ 4,525 $ 8,921 Interest
income (1 ) - (1 ) (1 ) Provision for income taxes 620 620 1,241
1,241 Depreciation 2,027 1,952 4,095 3,823 Other regulatory gaming
assessments 100 (214 ) 83 (263 ) Loss (gain) on the sale or
disposal of property
27
9 45
(63 ) Adjusted EBITDA
$ 5,855 $
7,388 $ 9,988
$ 13,658 Net revenues
$ 37,702 $
42,077 $ 70,817
$ 79,668 Adjusted EBITDA
margin 15.5 %
17.6 %
14.1 %
17.1 %
MTR GAMING GROUP, INC. SELECTED FINANCIAL INFORMATION
(continued) (dollars in thousands) (unaudited)
Three Months Ended Six Months Ended June
30 June 30 2014 2013 2014
2013 Adjusted EBITDA (continued): Scioto
Downs: Net income $ 9,049 $ 8,859 $ 17,220 $ 18,026 Interest
expense 19 20 37 39 Provision for income taxes 513 378 909 710
Depreciation 3,414 3,370 6,818 6,802 Loss on disposal of property
8 -
8 - Adjusted
EBITDA $ 13,003 $
12,627 $ 24,992
$ 25,577 Net
revenues $ 38,415
$ 37,564 $
74,199 $ 73,535
Adjusted EBITDA margin
33.8 %
33.6 %
33.7 %
34.8 %
Corporate: Net loss $ (19,854 ) $ (19,172 ) $ (40,618 ) $
(39,105 ) Interest expense, net of interest income 17,371 17,364
34,741 34,725 Benefit for income taxes - (612 ) - (612 )
Depreciation 9 7 19 16 Loss on the sale or disposal of property - -
1 - Strategic transaction costs
383
- 904
- Adjusted EBITDA $
(2,091 ) $
(2,413 ) $
(4,953 ) $
(4,976 ) MTR Gaming Group, Inc.
(consolidated): Net (loss) income $ (1,182 ) $ 2,386 $ (7,395 )
$ 1,600 Interest expense, net of interest income 17,389 17,384
34,777 34,761 Provision for income taxes 1,133 386 2,150 1,339
Depreciation 7,705 7,547 15,489 15,091 Other regulatory gaming
assessments 100 (214 ) 83 (263 ) Loss (gain) on the sale or
disposal of property 27 (11 ) 45 (93 ) Strategic transaction costs
383 -
904 -
Consolidated Adjusted EBITDA $
25,555 $ 27,478
$ 46,053 $
52,435 Net revenues $
124,900 $ 131,377
$ 239,728 $
254,104 Adjusted EBITDA margin
20.5 %
20.9 %
19.2 %
20.6 %
MTR GAMING GROUP, INC. CONSOLIDATED BALANCE SHEETS
(dollars in thousands) June 30 December
31 2014 2013 (unaudited) ASSETS
Current assets: Cash and cash equivalents $ 104,669 $
100,124 Restricted cash 7,900 7,255
Accounts receivable, net of allowance for
doubtful accounts of $153 in 2014 and $151 in 2013
3,693 4,853 Inventories 4,242 4,272 Deferred financing costs 1,642
1,642 Prepaid expenses and other current assets
8,689 7,850 Total
current assets 130,835 125,996 Property and equipment, net
362,938 371,364 Other intangible assets 136,043 136,080 Deferred
financing costs, net of current portion 5,945 6,766 Deposits and
other 2,122 1,801 Non-operating real property 10,769 10,769 Assets
of discontinued operations
184
184 Total assets
$
648,836 $ 652,960
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 3,455 $ 2,998 Accounts
payable - gaming taxes and assessments 8,053 9,947 Accrued payroll
and payroll taxes 5,800 5,466 Accrued interest 27,344 27,344 Other
accrued liabilities 19,027 17,043 Construction project and
equipment liabilities 274 788 Deferred income taxes 837 837
Liabilities of discontinued operations
116
116 Total current liabilities
64,906 64,539 Long-term debt 559,894 558,834 Other
regulatory gaming assessments 4,685 4,806 Long-term compensation
247 871 Deferred income taxes 19,258 17,412 Other long-term
liabilities
429 497
Total liabilities
649,419
646,959 Stockholders' equity: Common
stock - - Additional paid-in capital 65,843 65,047 Accumulated
deficit (66,538 ) (59,143 ) Accumulated other comprehensive loss
(112 ) (127
) Total stockholders' (deficit) equity of MTR Gaming
Group, Inc. (807 ) 5,777 Non-controlling interest of discontinued
operations
224 224
Total stockholders' (deficit) equity
(583 ) 6,001
Total liabilities and stockholders' (deficit) equity
$
648,836 $ 652,960
MTR Gaming Group, Inc.John W. Bittner, Jr.,
724-933-8122Executive Vice President and Chief Financial
OfficerJbittner@mtrgaming.comwww.mtrgaming.com
Mtr Gaming (NASDAQ:MNTG)
Historical Stock Chart
From Oct 2024 to Nov 2024
Mtr Gaming (NASDAQ:MNTG)
Historical Stock Chart
From Nov 2023 to Nov 2024
